On July 31, 2010, the Accounts Receivable balance of Questor Application, Inc., is

$320,000. The Allowance for Uncollectible Accounts has a $6,400 credit balance. Questor prepares the following aging schedule for its accounts receivable:

Requirements 1. Journalize the year-end adjusting entry for uncollectible accounts on the basis of the aging schedule. Calculate the resulting ending balance of the Allowance account based on the account aging. Show the T-account for the Allowance on July 31,2010.
2. Assume that instead of a $6,400 credit balance, there is a $500 debit balance in the Allowance account prior to adjustment. Journalize the year-end adjust¬ ing entry for uncollectible accounts on the basis of the aging schedule. Calculate the resulting ending balance of the Allowance account based on the account aging. Show the T-account for the Allowance on July 31, 2010.

Transcribed Image Text:

Age of Accounts 1-30 31-60 61-90 Over 90 Days Days Days Days Accounts Receivable... $175,000 $70,000 $60,000 $15,000 Estimated Percentage Uncollectible. 0.8% 3.0% 5.0% 60%